With the press release dated February 23^rd 2022, the European Commission disclosed the adoption of a proposal for a Directive on corporate sustainability due diligence.

Given the key role played by the companies in the building of a sustainable economy and society, the proposal aims to implement the effective fulfillment of fundamental human rights included in the international conventions, along with the process of green transition.

Though many Member States have already introduced national legislation on the matter, and several companies have adopted measures on their own initiative, it is clear that a large-scale improvement is needed, which cannot be reached on an individual action basis only. Futhermore, in order to obtain a satisfying outcome, the proposal introduces some specific duties addressed to the directors of the companies, consisting in the set up and supervision of the implementation of due diligence.

More in detail, the initiative of the EU Commission has as its main object the equal access to safe and healthy working conditions for all workers, and the prevention of adverse environmental impacts contrary to key environmental conventions. In view of achieving such results, companies will be required to: i) integrate due diligence into policies; ii) identify actual or potential adverse human rights and environmental impacts; iii) prevent or mitigate potential impacts; iv) bring to an end or minimise actual impacts; v) establish and maintain a complaints procedure; vi) monitor the effectiveness of the due diligence policy and measures; vii) and publicly communicate on due diligence.

Coming to the subjects to whom the proposal is referred, the new due diligence rules will apply to EU companies – in particular, to all EU limited liability companies of substantial size and economic power (with 500 or more employees and at least € 150 million in net turnover worldwide) and to other limited liability companies operating in defined high impact sectors, with more than 250 employees and a net turnover of € 40 million worldwide and more – as well as to non-EU companies active in the EU with the same turnover threshold of the just mentioned EU companies, if generated within the EU.

The proposal will be presented to the European Parliament and the Council for approval. If adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission.

Dott.ssa Carlotta Varesio

Download here the Press release of the Commission dated February 23rd 2022 

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